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ASK THE AUDIENCE

Much has been made of the wisdom of crowds, and now two new websites are aiming to harness the power of the many when it comes to decision-making.

IT’S AN ENIGMA OF SOCIAL NETWORKING; how do you get millions of users to do something more useful than just sending tweets about what they had for breakfast? The brute force of social networking has been clearly demonstrated, from the hordes who invaded the London Underground on the last day of legal Tube drinking to the recent Twitter-inspired youth revolution in Moldova.

As any parent who has returned home to the wreckage of a teenage party will testify, social networks are fantastic tools for bringing vast amounts of people together in one place. But where’s this ‘wisdom of crowds’? How can we harness the power of social networks to provide answers to the questions that vex us? Two new sites are trying to solve precisely this problem, and they’re taking two different approaches.

Hunch (hunch.com) is taking a psychological/ sociological route. Anyone who’s ever done a Myers-Briggs personality test will know that however individual we think we are, we are not unique snowflakes. In fact, after answering a small amount of questions we can be easily pigeonholed into a personality type that is unerringly accurate in describing our behaviour and how we’ll make decisions. It’s this methodology that Hunch uses, asking you a series of questions and matching those against responses from other users, to find answers from users most like you.

So, for instance, with the question “What opera should I listen to?” it starts by asking you whether you like your music ‘bombastic’ or ‘light’, then goes through your preference for classical or modern styles, whether you like operas based on books and what language you want to hear it in. After a few questions it gives you recommendations. This is an intriguing approach to decision-making – concentrating more on who you are than on the veracity of the facts.

Aardvark (vark.com) takes a more direct approach, and is essentially a mass consumer version of the kind of question tools that have existed for some time in professional networks like LinkedIn. Aardvark asks you to select categories you are happy to be an expert on, then plugs you into the rest of the community. The idea is you can then ask Aardvark any question and it will find the most appropriate person to answer the question for you. And, in return, you become the destination for questions on the topics of your expertise. Answers are gleaned swiftly, and you can get into a dialogue with the expert.

They’re both interesting ways of gleaning information, but Hunch’s more introspective approach feels more ‘human’. We’re imperfect decision-makers, however much we like to see ourselves as driven by logic, and Hunch takes this into account. You can end up using it like a Magic Eight Ball on steroids, but ask Hunch a question and sometimes just the process of following the decision tree it offers helps you think about the question you’re asking with more clarity. Which can help you get to the right answer quicker.

CHRIS LOCKE HAS SPENT 15 YEARS WORKING AS AN ACADEMIC AND STRATEGIST IN THE INTERNET AND MOBILE TELECOMS INDUSTRIES. HE IS THE EDITOR OF THE BOOK THUMB CULTURE – THE MEANING OF MOBILE PHONES FOR SOCIETY.

GOVERNING THE CRISIS

Governments and central banks have tried to limit the effects of the recession, but deeper, more meaningful changes are required on their part.

BEFORE IT RUNS ITS COURSE, THE CURRENT global recession may have turned into the longest and deepest economic downturn since the Great Depression of the 1930s. Alan Greenspan certainly thinks so. As early as February 2007, Greenspan told an audience that he’d begun to see signs of impending recession in the US. His comments were made long before the crisis broke, but you could argue that not only should he have foreseen the current situation even sooner, he should have done something about it.

The US housing bubble that led to the credit crisis can be blamed in part on the excessive liquidity created by the Federal Reserve while it was presided over by Greenspan, and in some people’s eyes that means he should be blamed for the situation we’re in today. Yet his successors did exactly what the now 83-year-old would have done if he had still been in the job, choosing to fight the crisis by lowering interest rates.

The Fed, followed by the Bank of England and the European Central Bank, went even further than that. With interest rates at historic lows, they introduced ‘quantitative easing’, whereby central banks buy commercial banks’ assets so that the latter improve their balance sheets and can continue lending to businesses and households. The financial sector is so important to our economy that central banks had no choice – they had to throw the commercial banks a lifeline by helping them to regain a healthy buffer of capital. But the lifeline will not be free: central banks may benefit from the crisis by charging commercial banks a high margin, and indeed the Bank of England recently reported profits of profits of almost a billion pounds, its best result almost a billion pounds, its best result since it was established more than 300 years ago.

And it’s not just central banks that have taken measures to prevent the financial industry from getting into even bigger problems. Governments have also played their part in rescuing the sector by bailing out banks and providing government guarantees so banks can once again borrow cheaply on the capital markets. And of course government attempts to stave off the recession have extended well beyond the financial sector, with money poured into a range of industries, from car manufacturers and their suppliers to biotech companies.

But despite the efforts of governments and central banks, neither monetary nor budgetary policies have been able to prevent a fall in consumer and business confidence. As sales dropped, factories closed and bankruptcies and redundancies rose to the highest levels in decades, proof that no amount of low interest rates and high government spending will be enough to reverse the recession. It will take years to calculate the final cost, although we already know that the governments’ efforts will lead to huge deficits and a significant increase in government lending.

Unfortunately, with the prospects of lower tax revenues and relatively high unemployment for some time to come, the situation will not improve immediately. Soon, a debt to GDP ratio that does not exceed 60% of a country’s GDP (as agreed in the Maastricht criteria and in the Eurozone’s stability pact) may be wishful thinking for even the largest states in the European Union.

Does this mean that we’ll make the next generation pay for today’s recession? Possibly, but not necessarily. Once this crisis is over, our governments must become more efficient, spending where and for whom it is most needed without wasting taxpayers’ money. With a more streamlined, more effective system in place, we will stand the best chance of recovering from this recession and not repeating the same mistakes.

PASCAL PAEPEN IS AN INVESTMENT BANKER FOR KBC FP IN THE CITY AND THE FINANCIAL CORRESPONDENT FOR BELGIAN RADIO1

FANCY A PINT?

We Europeans enjoy a drink every now and then, but some like it more than others! Flight search engine Skyscanner has compiled its list of the biggest drinking nations, so we’ve pulled together the top five from the VLM Airlines and CityJet destinations.

1 Ireland
(overall position no2)
BEER CONSUMPTION PER CAPITA: 131.1 LITRES
Famous for their Guinness, but also big drinkers of other brands of stout and porter, the Irish are renowned for their love of the craic, making Dublin one of the world’s great drinking cities.

2 Germany
(overall position no3)
BEER CONSUMPTION PER CAPITA: 115.8 LITRES
Germany’s Oktoberfest is the world’s most famous beer festival. The Germans enjoy a variety of brews, from Bavarian weissbiers to Rauchbier (smoked beer) and Bock, which weighs in at over 6.4% alcohol.

3 UK
(overall position no6)
BEER CONSUMPTION PER CAPITA: 99 LITRES
At last, the British are overcoming their lager lout reputation, and while lager remains the nation’s most popular beer, real ales are rising in popularity. From big brands like Greene King down to tiny micro-breweries producing just a few barrels at a time, real ale is very much on the up.

4 Belgium
(overall position no7)
BEER CONSUMPTION PER CAPITA: 93 LITRES
With their extensive variety of specialist beers brewed by monks and artisans (and not forgetting global giant Anheuser-Busch InBev) the Belgians are recognised all over the world as great connoisseurs of beer. Catering for most tastes, they are expert at producing fruit beers, dark beers, light beers – and spontaneously fermenting Lambic beers.

5 Luxembourg
(overall position no10)
BEER CONSUMPTION PER CAPITA: 84.4 LITRES
Luxembourg is small, but it borders with Belgium, Germany and France so has absorbed those countries’ brewing expertise. The Grand Duchy has at least seven breweries creating a variety of beers.

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